The Last Will & Testament of Bill & Melinda Gates is not a public document. However, some information about it is public such as the vast majority of their estate will go to their foundation. There is speculation that their three children will inherit no more than $10 million from their parents. Bill said that he wants his kids to have their own careers and that too much money would spoil them – that is seen is so many cases of affluent scions.
$10 million is a lot of money. By my calculations, it is enough for someone to live on quite comfortably for the rest of his or her life. Invested well, that money should earn at least 8% per year. If the owner “harvests” just 5% of the balance each year leaving 3% of the growth to be reinvested as an inflation offset. In the first year, the owner would get $500,000 which is certainly more than enough to live on and even be generous within that “budget.” In subsequent years, the owner will get $500,000 plus the annual 3% inflation adjustment.
What if the very rich capped how much they would leave each child at $10 million in cash (I’m speaking strictly regarding cash, not property or businesses). High net-worth families could focus on giving away everything over the line to benefit others. In their own lifetimes they would get to see the joy they bring by funding medical research, building schools and parks, providing college scholarships, and countless other worthwhile causes. And the best part is they’ll never leave their families in want.
I challenge high net worth families to let their children know that each one of them will inherit no more than $10 million and then ask them to participate in giving away everything else. What a lesson that would be to everyone – to see that money isn’t the answer for everything but love and family are.
Lead On!